v3.26.1
Fair Value
 6 Months Ended
Jun. 30, 2026
Fair Value Disclosures [Abstract]  
Fair Value Fair Value
Fair Value Option
The Company may elect to apply the fair value option of accounting for certain of its financial assets or liabilities due to the nature of the instrument at the time of the initial recognition of the investment. As of June 30, 2026, the Company has elected not to apply the fair value option for any other eligible financial assets or liabilities.
Fair Value of Financial Instruments
In addition to the above disclosures regarding financial assets or liabilities which are recorded at fair value, GAAP requires disclosure of fair value about all financial instruments. The following disclosure of estimated fair value of financial instruments was determined by the Company using available market information and appropriate valuation methodologies. Considerable judgment is necessary to interpret market data and develop estimated fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize on disposition of the financial instruments. The use of different market assumptions and/or estimation methodologies may have a material effect on estimated fair value.
The following table presents the principal amount, carrying value and fair value of certain financial assets and liabilities as of June 30, 2026 and December 31, 2025 (dollars in thousands):
June 30, 2026December 31, 2025
Principal AmountCarrying ValueFair ValuePrincipal AmountCarrying ValueFair Value
Financial assets:(1)
Loans and preferred equity held for investment, net(2)(3)
$2,899,771 $2,893,663 $2,850,477 $2,679,909 $2,678,315 $2,657,083 
Financial liabilities:(1)
Securitization bonds payable, net$1,417,112 $1,407,850 $1,417,112 $982,090 $977,082 $982,090 
Mortgage and other notes payable, net413,533 411,604 391,006 416,302 414,060 394,819 
Credit facilities926,225 926,225 926,225 1,078,098 1,078,098 1,078,098 
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(1)The fair value of other financial instruments not included in this table is estimated to approximate their carrying value.
(2)Excludes future funding commitments of $145.5 million and $112.2 million as of June 30, 2026 and December 31, 2025, respectively.
(3)Carry value excludes CECL reserves of $98.7 million and $87.4 million as of June 30, 2026 and December 31, 2025, respectively.
Disclosure about fair value of financial instruments is based on pertinent information available to management as of June 30, 2026. Although management is not aware of any factors that would significantly affect fair value, such amounts have not been comprehensively revalued for purposes of these consolidated financial statements since that date and current estimates of fair value may differ significantly from the amounts presented herein.
Loans and Preferred Equity Held for Investment, Net
For loans and preferred equity held for investment, net, fair values were determined: (i) primarily by using rates currently available with similar terms and remaining maturities to estimate fair value. These measurements are determined using comparable U.S. Treasury rates as of the end of the reporting period; or (ii) in some cases, based on discounted cash flow projections or similar analysis of principal and interest expected to be collected, which includes consideration of the financial standing of the borrower or sponsor as well as operating results of the underlying collateral. Since some fair value measurements are based on unobservable inputs, they are classified as Level 3 of the fair value hierarchy.
Securitization Bonds Payable, Net
The Company’s securitization bonds payable, net bear floating rates of interest. As of June 30, 2026, the Company believes the unpaid principal balance approximates fair value given the floating rate nature of the bonds and significant level of subordination within the securitization. These fair value measurements are based on observable inputs, and as such, are classified as Level 2 of the fair value hierarchy.
Mortgage and Other Notes Payable, Net
For mortgage and other notes payable, net, the Company primarily uses rates currently available with similar terms and remaining maturities to estimate fair value. These measurements are determined using comparable U.S. Treasury rates as of the end of the reporting period. These fair value measurements are based on observable inputs, and as such, are classified as Level 2 of the fair value hierarchy.
Master Repurchase Facilities
The Company has amounts outstanding under Master Repurchase Facilities. The Master Repurchase Facilities bear floating rates of interest. As of June 30, 2026, the Company believes the carrying value approximates fair value due to the short-term nature of the debt, and as a result, contractual rates should equate to market rates. These fair value measurements are based on observable inputs, and as such, are classified as Level 2 of the fair value hierarchy.
Other
The carrying values of cash and cash equivalents, restricted cash, receivables, and accrued and other liabilities approximate fair value due to their short term nature and credit risks, if any, are negligible.
Nonrecurring Fair Values
The Company measures fair value of certain assets on a nonrecurring basis when events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. Adjustments to fair value generally result from the application of lower of amortized cost or fair value accounting for assets held for sale or write-down of asset values due to impairment.
CECL
During the six months ended June 30, 2026, the Company recorded specific CECL reserves of $3.6 million related to three multifamily loans, one office loan and one industrial loan. The specific CECL reserves were also charged off during the six months ended June 30, 2026 following resolution of the loans.
Impairment of Operating Real Estate
During the three months ended June 30, 2026, the Company recorded $9.3 million of impairment related to two retail properties and one multifamily property. Refer to Note 4, “Real Estate, net” for further discussion.